As Tuesday marked the sixth anniversary of sports betting
legalization in America due to the landmark 2018 Supreme Court decision
that paved the way for states to legalize sports betting, the industry
has become an unmissable part of mainstream sports.
It’s harder than ever to watch or attend a sporting event without
either placing a wager or seeing some form of marketing for sports
betting companies. Sports betting handle, a term for how much total
money is wagered, and total revenue reach record highs every year.
Americans across the country wagered a record $119.84 billion on
sports betting in 2023, a 27.5% increase from 2022, according to the
American Gaming Association. The total revenue was $10.92 billion, a
44.5% increase.
A key contribution to last year’s numbers was new markets legalizing
sports betting. North Carolina recently became the 38th state, along
with Washington, D.C., to feature live and legal sports betting markets
and the 30th state to offer mobile sports betting, according to the
American Gaming Association. More than two-thirds of American adults
live in those markets. Sports betting has also become a growing source
of tax revenue for many states, according to the United States Census
Bureau.
With sports betting now an integral part of sports and growing every year, the question begs: will the growth ever stop?
It might be easy to say that the rapid rate of sports betting’s
growth will eventually stop, but no time soon. With sports gambling
legalized in 38 states, 12 states that could change course in the future
but not anytime soon. However, Missouri, Oklahoma and Minnesota have
pending legislation.
“This is something that has to be passed by state legislature,” said
Christopher Boan, the lead writer at BetArizona.com and an expert in the
sports gambling industry. “The holdouts, at this point, aren’t moving
quickly.”
California and Texas – two states that haven’t legalized sports
betting – are the biggest dominos waiting to fall. The nation’s two most
populous states have tried, and failed, to legalize sports betting, and
progress has stalled.
With 15 teams from the four major professional sports leagues located
in California and eight in Texas, the eventual legalization of sports
betting would have massive ramifications on the sports betting industry
and the professional sports leagues.
“It’ll continue to churn on a little bit as we wait for those big
market states to decide what they want to do with sports betting, and
once those guys launch, we do this all over again and it’s going to be
the new gold rush,” Boan said. “When and if California and Texas ever
move on sports betting, that will be the next big frontier.”
New York’s success could give insight into how big legalization in
California and Texas could be. New York has the second largest sports
betting handle after only launching online sports betting in early 2022
and is projected to pass New Jersey by 2025.
The sports betting industry thrives on new markets. Six states
legalized sports betting in 2023, including one of the biggest national
markets in Florida, but North Carolina is likely to be the only state to
launch this year.
Despite the lack of new sports betting markets, the existing ones
will continue to mature, which factors into growth as much as new
markets. Arizona, which legalized sports betting in April 2021 and
launched in September 2021, is a prime example.
“No new industry hits the ground running at full capacity, and event
wagering is really no different,” said Arizona Department of Gaming
public information officer Dayne O’Brien. “The industry has seen that
steady growth since inception, and it will continue as it fully
develops.”
The state’s three largest monthly handles were from Nov. 2023 to Jan.
2024, with totals hovering near $700 million a month, according to the Arizona Department of Gaming.
Nine of the last 12 months saw increased handles over the same month of
the previous year. Arizona’s total handle is $15,060,277,705, the ninth
largest of any state and more than some states that launched sports
betting before 2021.
Arizona’s continuous growth is in part due to the amount of online operators the state allows.
“The enabling legislation allowed for a maximum of 20 event wagering
licenses in the state, which was 10 reserved for Arizona tribes and 10
reserved for an owner of an Arizona professional sports team or
franchise,” O’Brien said. “In addition, there are 10 limited wagering
licenses available, and those are more reserved for race track and
closures and OTB’s, which are additional wagering facilities.”
The industry is dominated by online wagers. It’s far easier to place a
bet on a phone than going to an in-person location and allows for more
bets, and Arizona is no different. Only about $8 million from January’s
$706 million handle was wagered at retail locations.
Arizona currently has 17 online operators with sports betting apps,
including the recently launched ESPN BET, and 17 retail sportsbooks in
Arizona. Although the online handle makes up almost all of the total
handle share, the in-person locations offer their own experience that
the sportsbooks try to capitalize on, according to Boan.
“People like going to sporting events, the same way they like going
to sports bars, and this is just an opportunity to capture as much of
that audience as they can,” Boan said. “Plus the older audience that’s
maybe more reticent to spend their money on a mobile sports book is more
comfortable with the retail option.”
The age of sports bettors is also a key factor in the past and future
industry growth. Like most industries, younger audiences are the target
demographic for sports betting companies. Sports bettors between the
ages of 18-34 made up 38% of the market, according to the Fantasy Sports
and Gaming Association. While older bettors might be more reluctant to
bet online, it’s the preferred method for younger generations, which
leads to more bets.
The younger audience will only keep growing. Every year, more people
turn legal betting age. Additionally, 63% of sports bettors make more
than $50,000 in salary a year, so while new bettors reaching legal
betting age are less likely to have disposable income to place bets,
more will reach an age where they have an income to bet with as the
industry and markets mature. Compared to the rates at which older people
stop betting, these trends are happening faster.
As the number of young people who get access to the risky industry of
sports betting rises, so too does the concern about the problems that
gambling poses. As sports betting revenue grows, states are allocating
more funding toward prevention, treatment, and education programs for
problem gambling.
In Arizona, a portion of the tax revenue from sports betting is
earmarked for the Division of Problem Gambling and its resources. This
includes counseling services, a 24/7 helpline, and awareness campaigns
targeted at high-risk groups like college students.
The industry is also making greater efforts to increase security and
ID verification, partnering with advocacy groups such as the National
Council on Problem Gambling and improving self-regulation tools that
allow users to set limits on their gambling behavior.
“We know that young people are very tech-savvy, they have their
phones with them, and with the new legalization across the nation, it’s
something that is very viable any place, anywhere, anytime,” said Elise
Mikkelsen, division of problem gambling director with the Arizona
Department of Gaming. “We do have concerns about that, and the younger
folks are people that we’re targeting with our resources.”
Sports betting problems aren’t exclusive to fans, as professional
sports leagues are running into more problems with athletes after
immersing themselves in the sports betting industry.
The NFL is in a partnership with FanDuel, DraftKings and Caesars
Entertainment, and last year’s NBA collective bargaining agreement
allowed players to buy into sportsbooks under specific conditions. While
recent problems have surfaced in professional sports that resulted in
the NBA banning Jontay Porter and MLB star Shohei Ohtani’s interpreter
facing federal charges, leagues will not shy away from sports betting
anytime soon.
In Arizona, sports betting companies have taken advantage of pro
sports collaborations. The Cardinals were the first NFL team to open a
retail sportsbook in their stadium with the BetMGM Sportsbook at State
Farm Stadium. FanDuel opened a sportsbook at the Phoenix Suns’ Footprint
Center, as did Caesars at the Diamondbacks’ Chase Field. This year
marked the debut of DraftKings’ sportsbook at TPC Scottsdale during the
Phoenix Open.
Those partnered operators and teams have to follow regulations given
by the Arizona Department of Gaming. Six years ago, the Suns and FanDuel
implementing rules on how they advertise sports betting to their fans
was fiction, and now it is the norm for today’s sports.
“If one of those entities is correlated to one of the sports books
here at the Department of Gaming, then there are rules and regulations
in place regarding how they can advertise, language that they need to
utilize, rules that are in place for them that they must follow,”
Mikkelsen said.
With sports betting now deeply woven into the fabric of professional
and collegiate sports, there appears to be no turning back from this
transformation of the fan experience. The once niche activity has become
a part of how sports are consumed and marketed in the modern era across
America.
And as lucrative new markets like California and Texas potentially
open up, the surge in younger bettors and professional leagues further
embracing gambling partnerships and integrations, all signs point to the
sports betting boom showing no signs of slowing down anytime soon
across the nation.
